Tile Shop(TTSH) - 2025 Q1 - Quarterly Results

Financial Performance - Net sales for the first quarter of 2025 decreased by $3.7 million, or 4.1%, compared to the first quarter of 2024, with comparable store sales also declining by 4.0%[3][6] - Net income for the first quarter of 2025 was $0.2 million, a significant decrease from $1.7 million in the same period last year, resulting in a net income per diluted share of $0.00[3][4] - Adjusted EBITDA for the first quarter of 2025 was $4.6 million, down from $7.4 million in the first quarter of 2024, representing 5.2% of net sales[3][11] - Operating income margin decreased to 0.2% from 2.5% year-over-year, indicating a decline in operational efficiency[27] - Net income for the three months ended March 31, 2025, was $172, down from $1,689 in 2024, reflecting a significant decrease of approximately 90%[28] - The adjusted EBITDA margin for the three months ended March 31, 2025, was 5.2%, down from 8.1% in the previous year, indicating a decline in profitability[27] Cash and Assets - The company had no debt outstanding and cash and cash equivalents increased to $27.1 million from $21.0 million at the end of the previous quarter[3][10] - Cash and cash equivalents increased to $27,059 at the end of March 2025, up from $20,957 at the end of December 2024, marking an increase of about 29%[28] - Total current assets rose to $127,699 as of March 31, 2025, compared to $119,822 at the end of December 2024, an increase of approximately 7%[25] - Total liabilities increased to $201,597 as of March 31, 2025, compared to $196,691 at the end of December 2024, reflecting a rise of about 2%[25] - The company reported a net cash provided by operating activities of $9,994 for the three months ended March 31, 2025, down from $18,589 in 2024, a decrease of approximately 46%[28] - Cash flows used in investing activities amounted to $3,625 for the three months ended March 31, 2025, compared to $2,719 in 2024, reflecting an increase in capital expenditures[28] Margins and Expenses - Gross margin improved to 66.0%, up 20 basis points from 65.8% in the first quarter of 2024, despite a decrease in gross profit of $2.2 million, or 3.7%[3][7] - Selling, general, and administrative expenses decreased slightly by $0.1 million, or 0.3%, compared to the first quarter of 2024[3][8] - The effective tax rate decreased to 14.4% in the first quarter of 2025 from 20.2% in the same quarter of 2024, primarily due to a decrease in pretax income[3][9] Store Operations - The number of stores remained stable at 142, with no new openings or closures reported during the quarter[3][4] Strategic Management - Management is evaluating options to manage cost pressures from increased tariffs on imported goods, including sourcing adjustments and pricing strategies[4] Return on Capital - The Pretax Return on Capital Employed was 1.2% for the trailing twelve months as of the end of the first quarter in 2025, a significant decline from 11.3% in the prior year[3][13]